A Global Perspective on the Local

OPEN HEARTS, OPEN EYES

As published in the Whistler Pique Feb .02/2017 – see more OPEN HEARTS, OPEN EYES It’s been a dismal last week in the U.S. only to be topped off by the barring of immigrants from certain countries and refugees into America. My first reaction was that we Canadians should immediately retaliate and refuse Americans into […]

BIV: No final investment decisions on B.C. gas until decade’s end, experts say

Co-author of new book on LNG markets says Canada unlikely to export LNG until 2025 By Nelson Bennett | Oct. 25, 2016, LNG gas tanker loading in port | sattahipbeach/shutterstock When Natural Gas Minister Rich Coleman told BC Liberal Party supporters at a fundraiser last month that he expects a final investment decision on at […]

Move aside fossil fuels, a big energy watchdog is getting bullish on renewable sources. In its medium-term Renewable Market Report, the International Energy Agency on Tuesday significantly raised its five-year forecast for green energy, thanks to a rapid decline in costs and strong political support in key countries, such as the U.S. and China. The […]

The Realization of Hempcrete – Monty Chong-Walden

By Monty Chong-Walden This is not the story of how hempcrete came to be; it definitely was not created in Vancouver. It has been around for hundreds of years, if not thousands. The Hemp plant has been cultivated around the world for centuries (the government of Canada says 10,000 years), as well as lime mortar […]

Whistler BC: Ask Province and Feds for more money before taxpayers

Taxes up. Funding down. Spending up. Corporations expand and shrink based on a mix of outlooks including global financial prospects, currency valuation and sales forecasts. The RMOW does not derive income directly from product sales and needs to look at the economy closer than it is now. Between January 2015 and 2016, Canadian food prices […]

It’s been a dismal last week in the U.S. only to be topped off by the barring of immigrants from certain countries and refugees into America.

My first reaction was that we Canadians should immediately retaliate and refuse Americans into our country on the basis that their political views are akin to fascism. One could argue that the political decisions made by Washington have nothing to do with our sovereignty, nor that the electorate who voted in this new extremism will ever affect us.

Tell that to the Czechs in 1938 or a resident of Manchuria in 1931. Don’t think it won’t happen again? Maybe we Canadians don’t feel that way about the U.S. because we “look” and “talk” like Americans.

Visit Miami, as an example, and you’ll find the Spanish language is just as prevalent as English.

Last time I flew in, the U.S. customs border protection officer started out by asking me the routine questions in Spanish. I responded in French. He failed to see the humour. Three hours later, I was cleared.

Mexicans coming to Florida must feel that they “look” and “talk” like Americans. Ask your average Mexican how he feels now.

Then I took pause and remembered the half-dozen or so years I lived in the U.S., the amount of business I still do with Americans and how many people I consider friends south of the 49th parallel.

You cannot understand the American mentality unless you have lived there, and experienced the charm and openness that it offers.

I still remember July 4, 2004 living in Hermosa Beach, Calif. Just walking the 900 metres from my house to the beach, I was invited into a dozen or so backyard barbecues. They didn’t know me, and I didn’t know them. They just wanted to share their neighbourly love.

Or, how many times that when my flight landed at an American airport, everyone sat and waited until the troops had exited first to see their loved ones. So now, in their time of need, do we shut them out and eviscerate them from our love?

Good for him. And for Mexico’s president, Enrique Peña Nieto, for his recent comments and cancellation of his visit to the White House.

Let’s all take a stand, but not at the cost of burning bridges.

We as Canadians are a mongrel mix of immigrants, refugees, First Nations and people like me born here in the freest country in the world. Let’s embrace our American cousins in their time of need. Let’s not chastise them or embarrass them. They need support.

But let’s not be blindly tempted to ignore the dangers lurking to the south as it relates to international commerce, human rights and Canada’s sovereignty. Let’s be open hearted, and let’s keep both eyes open.

I recently posted a casual survey on the Facebook Whistler Politico page, a forum used by locals who actively participate online on a wide range of topics including politics in Whistler, BC. Now we all know from the results of the Presidential election, the last Canadian federal election and the last BC provincial election, that polls can be meaningless.

I make no illusions of the bias of my opinions, but did try to be objective as possible and did not answer the questions or post any comments myself. Why 10 questions? It was the maximum number allowed on the free version of Survey Monkey.

Still, it was interesting to see that 25 people responded and that there were lots of comments. These are the people who are the ones who are active on FB, and as we know from Trump, social media can be a very powerful tool. Thank you too all who participated.

Here are the highlights:

Only 20% feel that the town is going in the right direction

Most people are feel good about their personal situation

72% feel our local politicians are doing a fair to good job

Only 8% are in favour of the Renaissance Project, and 63% are opposed. There is a lot of uncertainty here that needs to be cleared.

76% are in favour of charging non-locals for the day lots

Being a politician is a thankless job, and I certainly appreciate what our Mayor , Council and municipal workers do and have done with a few exceptions. People are generally positive about many things in our little town, but growth and sustainability need to be put in check to make both economic and environmental sense. I feel that the Renaissance Project will be an issue come election time. A lot needs to be clarified given 30% of the respondents are undecided. To paraphrase a fellow local property owner with whom I spoke with today, it’s time for someone besides Ms. Wilhelm-Morden to step up to the plate and take some initiative and leadership on some of the pressing issues!

Anyways, here we go!

People were open on their comments, and I am sure these will open for discussion further on FaceBook. Here are all of the comments:

“Taxpayers are not responsible to provide housing for residents. The mountain has a greater obligation to do so as they own most of the business in town. RMOW had missed a great chance to exchange employee housing for rezoning the Mons property. Personal vendettas against Zen prevented a much needed supply of housing and education opportunity. Enough of the tourist emphasis! What about local homeowners and taxpayers and the crumbling and insufficient infrastructures – Meadowpark expansion, road improvements, parking, WAG – animal welfare!”

“Traffic is a nightmare, and why the hell aren’t non-residents being charged in the day lots? Some days I can’t even find any parking anywhere close to the village. Put in a massive parking lot south of the village, pay for it with parking fees, provide free buses. Charge $50 a day in the day lots, and people will take transit. If you think $50 a day is too high, then go stay at the Pan Pacific Vancouver.”

“The WHA needs an overhaul. The current team has become stagnant, unimaginative and ineffective. The website needs an overhaul and major update. The WHA also needs it own designated bylaw offer to ensure WHA housing is being rented or own by the intended. Too many millionaires owning, profiting and keeping housing out of the hands of tjose the program was designed to help.”

“PROTECT OUR WILDLIFE – Conservation officers are loose canons! Stop the hunting in the Callaghan- Stop hazing bears – Charge home owners that rent out units to multiple people – they should pay so that their garbage is collected and not dumped illegally Sort out traffic – get trains running again”

“Need to be open – town hall or other public meeting – about whether, and if so, how, we’re going to adhere to bed cap/limits to growth. Plans to manage slow/no growth. Realistic response to potential disappearance of RMI funding, not ‘Oh well, we’ll just raise property taxes to make up for it’ response.”

“Failing grade on the Environment, housing, child care, affordability and caring for the most in need (homeless, etc). Heck, just look at the CFOW report. We aren’t taking care of what is most important.”

“Please attract tourists that stay longer than 2 days. The rubber tire traffic do not spend money in our town”

“Keep tax increases down .”

“The DES scandal is a huge display of conflict of interest and denial. RMOW council knows very well that they would be on the hook for millions of dollars in repairs and replacements if they were sued. What they are doing now is a weak attempt at reconciliation. I don’t know why there hasn’t been a class action suit filed yet. I certainly would file if it affected me personally.”

“Whistler Blackcomb has not created any new staff housing while their number of employees has increased. They need to have housing for the transient workers and allow the housing they are taking out of the market go to locals living and working here. More strictly rental only housing needs to be crated quickly. My approval of Renaissance rests on WB stepping up immediately. Have a private developer build the housing with WB, Fairmont entering into long term leases.”

“housing, traffic, events need to be managed better.”

“You should remove the mayor from your ranking question above. She is full time vs part time council members. Btw your questions are a bit slanted. Traffic and housing vs. Macro issues.”

“The ship is so tight lipped and secure; that you have to wonder if moral is that high a RMOW.”

“Support Squamish in their fight against LNG. Be proactive with Dispensaries…wake up it’s coming!”

“maybe they should cut costs”

“professionally speaking. Personally, they are fairing well in the financial aspect of municipal compensations”

“Everthing is being sent to committee. Step up!”

“This Council has been completely ineffective, Mayor is not open and transparent as promised, she has been even worse!”

“some seem distracted by benign issues”

“Good, but I don’t have a clue what they are doing. There is far to much done behind closed doors. We should be having 4 town hall meetings a year.”

When Natural Gas Minister Rich Coleman told BC Liberal Party supporters at a fundraiser last month that he expects a final investment decision on at least one large liquefied natural gas (LNG) project before the May 9, 2017, provincial election, he either was making a promise he likely can’t keep, or has some inside knowledge that experts in global LNG markets don’t have.

Making a final investment decision (FID) on any large greenfield LNG project anywhere in the world in 2017 makes no economic sense, experts say.

In a recording of a talk Coleman gave at a party fundraiser on September 20 – leaked to Business in Vancouver – Coleman said he would likely meet with the presidents of Petronas and its partners in October to try to “restart” discussions on how to move its Pacific NorthWest (PNW) LNG project forward.

Coleman suggested the province is willing to reconsider the terms of a development agreement with Petronas. Coleman was in Malaysia last week and could not be reached to comment.

Since Coleman’s talk with BC Liberal Party supporters, federal Environment Minister Catherine McKenna announced she was giving the PNW LNG project a conditional green light. Coleman was not at the September 27 announcement and did not officially respond to it until October 14.

But “inertia,” not “momentum,” is perhaps a more accurate way to describe B.C.’s LNG industry.

Canada missed the first wave of opportunities to build new LNG projects, and thanks to a sudden oversupply from Australia, and lower than expected global demand, it will now have to wait for the next one – which is now projected to occur between 2025 and 2030.

Because it takes four to five years to build a large LNG project and associated pipelines, that means no company is likely to make an FID on a major new greenfield LNG project anywhere in the world until 2019 at the earliest, according to David Ledesma, a British natural gas and LNG consultant and fellow at the Oxford Institute for Energy Studies.

“Will they take [an FID] for Canada? Maybe they will,” Ledesma told Business in Vancouver. “But you won’t see LNG out of Canada by 2020. You might by 2025. I think you will by 2030.”

Carlos Murillo, an economist who recently analyzed the natural gas market for the Conference Board of Canada, agrees.

“Given the state of the markets, it’s hard to see that they will make a decision next year,” he said.

Ledesma is the co-author of a new book, LNG Markets in Transition. He and co-author Anne-Sophie Corbeau, a research fellow at Saudi Arabia’s King Abdullah Petroleum Studies and Research Center, recently summarized their book for the Center on Global Energy Policy.

One of the questions in their presentation was: “Will there be any Canadian LNG projects within the next decade?”

Their presentation explains why both Petronas and Shell have postponed the FIDs they initially planned to make in 2016, and why they are likely to continue to postpone them now until the end of this decade.

The global LNG market has changed in fundamental ways since Canadian LNG projects were proposed, Ledesma said. The most obvious trend is low oil and gas prices, thanks in part to a renaissance of oil and gas production in the U.S.

Clean coal and renewable energy also may eat into some of the energy markets in countries that rely on LNG for power, and Asian buyers are now reluctant to sign 20-year contracts, given the uncertain domestic gas demand and oil and natural gas price volatility.

Without those long-term commitments, it could become difficult to justify capital investments of $40 billion to $50 billion in greenfield projects when there are brownfield projects in the world that can be expanded at lower costs.

“You’ve got buyers now who’ve got no idea what the price is going to be, they don’t know what their economic growth is going to be, so how can they sign up for 20 years of a supply contract?” Ledesma said.

“They can’t do that without asking for a lot of flexibility, and the more flexibility they ask for, the less likely the banks are going to lend money against the take-or-pay contracts.”

“So suddenly you’ve got these projects – expansion projects – that are going to be, by definition, far, far cheaper than the greenfield sites in Canada or, indeed, the greenfield sites in East Africa or other greenfield sites.”

In addition to the market challenges that all energy companies now face, Petronas faces political challenges.

Petronas is a state-owned company, and the state itself, Malaysia, is embroiled in a fraud scandal that has prompted U.S. prosecutors to initiate a civil lawsuit in an attempt to seize assets that it alleges were misappropriated.

Petronas is also facing political problems in Chad. The African nation is trying to extract US$74 billion from Exxon Mobil Corp. (NYSE:XOM) over alleged unpaid royalties, and Petronas is a 35% partner in Exxon’s Chad oil holdings.

Petronas has already invested an estimated $8 billion in Canada on the acquisition of upstream natural gas assets. It would need to spend another $19 billion to build an LNG plant in Prince Rupert and associated pipelines.

Even if it cancels the PNW LNG project, it’s not as though Petronas’ investment in Canada would be a total writeoff.

When it bought Progress Energy, it acquired premium natural gas assets in northeastern B.C. that can continue to produce both gas and natural gas liquids for the domestic market at competitive prices.

So it can put PNW LNG into a holding pattern and still generate revenue from its B.C. gas wells until market conditions improve, said Colin Coe, an independent energy consultant who worked on the Oregon LNG project until the plug was pulled on it in April.

“If there is market uncertainty, then depending on what their pain threshold is, they can continue to do some work without pulling the trigger to start spending billions and billions,” Coe said.

“You’re unlikely to see them construct the pipeline and putting serious dollars into the project terminal, but you can still do a lot of work to line up everything so you can fast-track it when the market signal’s there.”

To date, Petronas has said little about its PNW LNG project.

In response to last month’s green light from McKenna, Petronas issued a terse statement.

“Petronas and its partners will study the conditions imposed by the Canadian authorities and conduct a total review of the proposed project prior to deciding on the next steps forward.”

In its medium-term Renewable Market Report, the International Energy Agency on Tuesday significantly raised its five-year forecast for green energy, thanks to a rapid decline in costs and strong political support in key countries, such as the U.S. and China.

The agency now sees global renewable electricity capacity jumping by 42% by 2021, up 13% from its forecast last year. The upbeat outlook comes after a record 2015 for renewables, when clean energy overtook coal as the biggest source of newly installed capacity in the world.

“Last year marked a turning point for renewables. Led by wind and solar, renewables represented more than half the new power capacity around the world,” the Paris-based agency said in a statement.

“We are witnessing a transformation of global power markets led by renewables and, as is the case with other fields, the center of gravity for renewable growth is moving to emerging markets,” IEA’s executive director Fatih Birol added.

The share of renewables in global energy production is forecast to climb to 23% in 2015 from 28% in 2021, making it the fastest growing source of electricity generation, according to the IEA. That’s mainly driven by three factors: more competition, political support and technological improvements.

“While climate change mitigation is a powerful driver for renewables, it is not the only one. In many countries, cutting deadly air pollution and diversifying energy supplies to improve energy security play an equally strong role in growing low-carbon energy sources, especially in emerging Asia,” the IEA said.

China alone, for example, counts for 40% of global growth in green energy, driven by higher targets set under the government’s five-year plan. In India, a sharp drop in costs is a key driver for a more optimistic outlook for solar energy, while the U.S.’s extension of federal tax credits for the industry is set to boost both solar and onshore wind power, according to the agency.

The IEA warned, however, that there are still reasons to be cautious. The cost of financing remains an obstacle in many emerging markets, while there’s still a lot of political uncertainty in many countries, it said.

“Meeting the objective of the COP21 global climate agreement to hold the increase in global average temperature to well below 2°C, will require stronger decarbonisation rates and accelerated penetration of renewables in all three sectors: power, transport and heat,” the IEA said.

Particularly in the transportation segment, the green energy industry is facing challenges from consistently low oil prices CLZ6, -1.17%LCOZ6, -1.26% . The share of biofuels, for example, in transport fuels is expected to rise only marginally to 4% in 2021 from 3% in 2015.

On Tuesday the Canadian federal government approved the Pacific NorthWest LNG enterprise, a shock to most people who believed they had voted for a government that was a friend to the environment, first nations and to a clean energy future. The BC government is happy. Albertans are ecstatic. Business leaders are cheering. Northern O & G workers are pleased.

Maybe they knew something we didn’t and they knew it was a moot point.

The NGI National Spot Gas Average fell 9 cents to $2.53, and after settling just inches away from $3.00 Tuesday, October futures succumbed to weakness as well, falling 4.4 cents to expire at $2.952. November shed 4.8 cents to $3.002. Apparently no one in Victoria noticed. Ottawa must have.

This morning it was reported that Petronas is considering selling its majority stake in a $27-billion Canadian liquefied natural gas (LNG) plant. Well duh. LNG prices for delivery into the main markets in northeast Asia have slumped more than 70 per cent since Petronas announced in 2012 that they would build in BC. Looking at recent numbers, there has been a 46 percent drop in benchmark Asian spot LNG since 2015 and an anticipated jump of 45 percent in supply by 2021. Last month, Petronas reported an 85 per cent slide in second-quarter profit and labelled the industry outlook “gloomy” well into 2017. Did no one in Victoria notice?

Not only that, but some of the conditions Ottawa placed on the project include putting a hard cap on carbon emissions that will likely mean the company will have to scale back the size of the operation. There is no way Petronas will build something half-ways, what multinational would unless it made economic sense. Do you really think they care about the environment?

The BC Government has been betting on the cheap prices for LNG in North America versus those in Asia. This has been their biggest mistake from the get go. The International Energy Agency (IEA) said in June 2016 in its Medium-Term Gas Market Report 2016 that between January and May 2016, the average differential between Asian LNG spot prices and U.S. prices was just US$2.5/MBtu, well below the average spread of around US$11/MBtu that had prevailed between 2011 and 2014. Gas prices in Asia will continue to be influenced by oil prices, but a period of expected oversupply and increasingly flexible LNG markets is seen to gradually reduce that gas/oil price correlation.

Then you have several liquefied natural gas projects led by Russia’s Novatek and Gazprom taking on investment from Japanese banks. It’s a matter of geography. Russia is closer to Asia than BC.

Other LNG projects in British Columbia have also faced delays, underlining the market outlook. In July, Royal Dutch Shell and its partners pushed back a decision on building an LNG export terminal, and C

hevron has delayed the scheduled 2017 start of its Kitimat LNG project.

The BC election is less than eight months away. The provincial Liberal government’s 2013 jobs plan promised LNG would generate $1 trillion in economic activity and create a $100 billion prosperity fund. There is $100 million in that fund. It came from general revenues. How are they going to spin this?

UPDATE: The Ministry of Natural Gas Development says in an email it spoke with Petronas and was reassured about the Pacific NorthWest LNG project after a news report indicated the Malaysian state-owned oil firm was pondering selling its stake. http://www.cbc.ca/news/business/petronas-lng-project-1.3785389

Well, anyone who has read my blog know where I stand on LNG in British Columbia. Against it for so many reasons, but really upset that our provincial government has no clue when it comes to global economics. LNG Canada — a partnership of Royal Dutch Shell, Korea Gas, Mitsubishi and PetroChina — made an announcement Monday that they were postponing their decision to go ahead with a facility, throwing more doubt onto the B.C. government’s hopes to complete anything before next year’s provincial election.

Here is a summary of where we stand today:

LNG Price

Henry Hub natural gas spot prices reached a nine-month high in June, according to the Energy Information Administration (EIA), which bumped its forecast for 2016 prices up to $2.36/MMBtu, with 2017 prices expected to average $2.95/MMBtu. In fact, LNG producers reported a banner month, as LNG exports rose by 500,000 tons to a total of 3.6 million tons during June 2016, an increase of 18.5 percent from May.

I would also predict a short term price rise as Cheniere Energy’s Sabine Pass liquefied natural gas (LNG) export plant on the U.S. Gulf Coast will shut down for planned maintenance in September

McKinsey Energy Insights (MEI), predicts in its latest research that LNG oversupply could last until 2024. As a result, this could mean that few LNG projects will reach final investment decision (FID) in the next 12 to 18 months including those in British Columbia.

MEI’s research shows that the current global LNG supply glut is exacerbated by the 100 mtpa of new export terminal capacity currently under construction in the U.S. and Australia. Furthermore, by 2019 oversupply will peak at 60 mtpa.

Their research shows that the current market oversupply is creating challenging conditions for operators hoping to take FID on projects in the near term,” said James Walker, a specialist at MEI. “For these projects to be viable they would require an assumption of either a sustained high LNG price post-2024 or a cost optimization strategy to reduce projected capital expenditures. Many projects will struggle to secure enough firm buyers in an oversupplied market. Even if projects do manage to progress to construction, the LNG supply will be hitting the market at a bad time.”

Here in BC we are seeing the effects with slumping natural gas prices on the global market meaning that the province budgeted for $128 million in royalties this year, far from the $493 million collected two years ago.

Changes in Policy Japan

Another challenge to future LNG growth comes from Japan, where regulators are examining contract restrictions and allowing LNG shipments to be re-sold, potentially under-cutting producers and putting downward pressure on prices. Such a move would disrupt existing contractual relations and potentially sever the link between LNG and crude prices. Existing restrictions on re-sale essentially force importers to consume whatever LNG they import; dropping these restrictions would allow importers to essentially become LNG merchants themselves, re-selling unwanted or unused LNG to other customer

Kitimat LNG Canada project indefinitely postponed.

LNG Canada CEO Andy Calitz said that a drop in natural gas prices around the world, particularly in Asia, has made the project too expensive for now. The consortium LNG Canada, which is jointly owned by Shell, PetroChina, Mitsubishi and Koga, was set to make a final investment decision for the project last February. That decision was later pushed back to the end of 2016.

I would predict that no decision is made until after the provincial election in 2017 with the company stating, “At this time, we cannot confirm when this decision will be made.

While Petronas could still make a decision this year, it faces some of the same market challenges that Shell faces, plus the added hurdles of First Nations hostility, an environmentally problematic site and a federal government that appears to be in no hurry to see the project proceed.

The two projects combined would represent a total capital investment of roughly $80 billion in British Columbia– the spending equivalent of about nine Site C dam projects.

The provincial Liberal government’s 2013 jobs plan promised LNG would generate $1 trillion in economic activity and create a $100 billion prosperity fund. There is $100 million in that fund. It came from general revenues.

Panama

The Panama Canal now allows wider liquefied natural gas carriers to pass through, making it possible for U.S. shale gas to more easily make its way to Japan.

The canal used to be able to accommodate vessels 32 meters wide. Now it can handle ships with widths of up to 49 meters. This, together with newly launched U.S. LNG exports, had promised to alter global energy distribution networks.

U.S-based LNG exporter Cheniere Energy in February started shipping LNG from a terminal in the U.S. state of Louisiana, along the Gulf of Mexico. And Sempra Energy’s Cameron LNG facility, near the Gulf Coast of Louisiana, recently received authorisation from the US Department of Energy (DOE). The authorisation will allow the company to export an additional 1.41 billion ft³ of natural gas per day (bcfd) from the proposed liquefaction expansion project to countries that do not have a free-trade agreement with the US. Following the order, the facility’s export capacity will be 24.92 million tonnes per year.

The USD$10 billion facility, which is under construction, is expected to commence operations during 2018 with the first full year of operations set to begin in 2019.

Many others are to follow. The U.S. Department of Energy estimates that some 550 LNG carriers will go through the Panama Canal per year. Most of them are bound for Japan and elsewhere in Asia.

Citibank paints another picture though with their analysts reporting on 13 July that U.S. LNG is too expensive to compete in the Pacific, even with the newly-upgraded Panama Canal allowing for larger shipments. The canal expansion, completed on 26 June, was expected to be a game-changer, as before only 6 percent of the world’s LNG fleet could pass through the locks, whereas now only the largest class of ship is incapable of passing through.

Hawaii

While Hawaii is a tiny market, it is interesting to note that In mid-May, Hawaiian Electric said a proposed contract to deliver 800,000 mt/year of LNG to Hawaiian Electric from FortisBC’s Tilbury LNG facility in British Columbia, starting in 2021, was contingent on the Hawaii Public Utilities Commission approving the merger. All of these things chip away at BC’s LNG Dream.

Summary

British Columbia’s biggest future customer according to many, Japan imported 88 million tons of LNG in 2014. According to a projection that the Japanese government made last year, the country’s LNG demand is expected to decline to about 65 million tons by fiscal 2030. Korea’s imports are down, and while Chinese demand is growing, a full 69% of their needs come from their own gas fields. This percentage is expected to rise as China looks for more self-dependence.

No one wants to see our economy flounder in BC, but without divestment it will crawl to a halt. The plan for BC to invest so much of its future on LNG has been probably the most unwise decision made by a government in years. So much riding on one component of the economy as the world turns away from fossil fuels including Saudi Arabia who is divesting from oil and introducing new taxes on products such as tobacco and sugary drinks as examples of attempts to wean its economy off oil.

I could subscribe to the environmental reasoning here, but the fact is that there is no need. Economics trump any other argument that people can come up with. Here are some snippets from The International Energy Agency, The Wall Street Journal, CNN, The Financial Post and others detailing how much the LNG future is in peril.

Summary

• The International Energy Agency cut its forecast for an increase in global gas demand and said that rising supplies of liquified natural gas (LNG) will lead to lower prices and a shift in trading patterns in the next five years. The Paris-based watchdog sees global demand rising by 1.5% a year through 2021 compared with a 2% increase projected last year, it said in its latest Medium-Term Gas Market Report.

• Demand will wane for all fossil fuels as the world economy requires less energy given improvements in technology. As demand growth for coal and oil also weakens, the share of gas among fuels will increase “modestly” by 2021, the IEA said

• The spot price of natural gas has dropped 54% in the past two years, according to the US Energy Information Administration, amid slack demand and increasing inventories.

• Eighteen LNG projects have been proposed in British Columbia, but none has secured a final investment decision.

• Royal Dutch Shell Plc., which is leading a consortium to develop an LNG project in British Columbia, has also delayed an FID till at least the end of the year.

• The lack of appetite to build new multi-billion natural gas export projects is driven by depressed natural gas prices. In Asia, LNG prices are currently trading at US$5 million British thermal units, a far cry from the US$15-18 per mBtu enjoyed earlier in the decade.

• Customers are also re-negotiating long-term supply contracts as new supply set to come onstream gives them more bargaining power. Globally, 16 projects with a capacity of just over 150 billion cubic metres per year are under construction— more than a third of the existing 415 bcm capacity.

USA
The American market has been kicking our ass. Our infrastructure was designed to ship oil and gas to the USA, and in a post-shale (fracking) world, the Americans are importing less and less with exports of Canadian natural gas to the U.S. dropping off to about seven bcf/d, from a high of 10 bcf/d in 2007.
U.S. LNG proponents, already enjoying the advantage of having infrastructure previously built for LNG imports, kept moving forward. In February, Cheniere Energy Inc., using its Sabine Pass facility in Louisiana, was the first U.S. company to ship LNG. The first LNG shipment from Canada is not expected until after 2020. Culbert says Pacific North West LNG’s project has lost customers to U.S. projects.

Shell Investment in BC
Royal Dutch Shell said Tuesday (June 7, 2016) that it’s shifting away from growing its liquefied natural gas business, as it moderates growth and prioritizes cash flow generation and returns on existing projects.
Shell said while its integrated gas business was previously a “growth priority,” it has now reached a critical mass after completing the acquisition of gas giant BG Group in February. The proposed Prince Rupert LNG project in B.C. that BG put on hold in 2014 does not appear on a list of projects with pending investment decisions in Shell’s presentation released Tuesday

Global prices

Global natural gas prices will remain under pressure in the medium-term as demand remains tepid across the world leaving suppliers to scramble for new markets, according to the International Energy Agency. “Weak demand, low prices and a sharp cut back in investment weigh on growth,” the Paris-based energy watchdog said in its latest five-year natural gas forecast, published Wednesday June 8, 2016.

Chinese demand for Fossil Fuels

The IEA expects natural gas demand to grow at 1.5 per cent annually till 2021, compared to the robust 2.2 per cent annual growth seen in the past five years.

According to the IEA, Major traders and sellers of liquefied natural gas will begin to look to new markets over the next five years as demand from traditional centers wanes, the International Energy Agency said in a report. In parallel, global supply is set to grow exponentially, putting pressure on prices in the spot market. Cheaper prices for alternative fuels, such as coal, will also soften gas prices, while more carbon-efficient technologies could push demand away from natural gas and toward renewables. The market will likely find strength in China, India and Southeast Asia as Japan and South Korea buy fewer volumes, the IEA said.

Chinese gas demand slowed to around 4% in 2015, leading to fewer purchases on the spot market. But demand is likely to recover, as the country diversifies its energy sources away from dirtier fuels, such as coal, to work toward improving air quality. However, Chinese demand remains the largest downside risk to overall gas demand growth, the IEA said.

This is not the story of how hempcrete came to be; it definitely was not created in Vancouver. It has been around for hundreds of years, if not thousands. The Hemp plant has been cultivated around the world for centuries (the government of Canada says 10,000 years), as well as lime mortar being used by the Romans for their architecture and by the Chinese in building the Great Wall.

The more recent story of hempcrete starts in the mid-1980’s in France, which was one of only a few countries that did not prevent the cultivation of hemp during the ban on the cannabis plant. Apparently, Charles Rassetti came up with the idea of using the woody inner core of the hemp plant (called “shiv” or “hurd” and previously thought of as waste) and mixing it with a lime binder to create a bio-aggregate for repairing the medieval oak-framed house he was renovating. Hempcrete spread from there through Europe in the 1990’s, with many countries now having a thriving hempcrete building industry. France, Spain, Italy, UK, the Netherlands, Belgium, Ireland, and others now have hemp building product manufacturers, which include pre-mixed hempcrete binders, hempcrete bricks, hempboard, hemp batt insulation, plus more.

My personal realization of hempcrete walls came while doing Internet research on sustainable building products. I think many people, who are familiar with building and have a sense of how we are polluting our living environments and planet with oil-based building products, will have the same astonished reaction to hempcrete, when first coming across it, as I had. It blew my mind that this product was not in widespread use, in this day and age of climate change and atmospheric carbon accumulation! As a simple and natural product, it ticks all the boxes of performance, safety and cost. I kept on thinking there must be something wrong with it – there must be a reason why it is not more widely used if it is such a phenomenal product!?!? But, I could find nothing that indicated any major faults of hempcrete as a product, except development.

Besides the fact that hemp cultivation was banned in Canada until 1998, it seems that there has been very little commercial interest in developing the product. Maybe this is because the traditional method of mixing hempcrete on site and pouring into forms seems too antiquated and messy for most people to consider. They want clean, manufactured, and wrapped-in-plastic building materials to arrive on site for their house or building. It may have something to do with the large established corporations that supply building materials having no interest in something new and not wanting to lose any market share. To some degree it seems that the market crash in 2008, as well as the last, very un-progressive government of Canada were holding things back here. There was one chart I saw for industrial hemp production in Canada, which showed good growth through 2006, then a slump for a number of years before finally recovering to former numbers in 2011.

It didn’t take long to realize that there is very little being done in Canada and the US in regards to hempcrete. There was some minor activity I could find, but for the size of the overall building industry, it was peanuts. The time seemed ripe to realize a much bigger hempcrete industry for North America and change how we build.
I decided, pretty well right there and then, I was going to jump in and make a difference with hempcrete!

It’s a beautiful Monday morning in Whistler and I am looking at the markets. I just read that the Saudi’s walked away from the Doha talks has analysts predicting $30 oil (price per barrel) within days. Thankfully the markets are not reacting, as it appears most hedge fund managers have already built in $20 oil into their financial models. The hick-up in January shook out a lot of the old pricing, and now the market is ambivalent. Of course, if you are a government like Venezuela, you are completely screwed.

This got me asking, what is happening with LNG pricing this month as the BC Government waits nervously for decisions to be made in Ottawa. Well, I spent a decade in the gaming industry, and I wouldn’t bet on LNG providing the BC economy with the billions of dollars promised, nor the tens of thousands of jobs. Here are a few reasons:

Cheap Oil: Well, if you are a company looking to change from oil to LNG, why? Oil is cheap. Low oil prices are denting the take-up of liquefied natural gas as a cleaner source of energy to power ships, and it will be a few more years yet before the fuel makes serious inroads into the marine bunker market. As an example, Norwegian LNG producer and industrial supplier Skangas told Reuters that ship-owners have delayed planned conversions to LNG from diesel for up to two years due to the fall in oil prices.

Not good for the environment by the way.

First Nations: Apparently, First Nations are not united in their love for LNG as we have been led to believe. First Nations leaders from British Columbia are scheduled to travel to Ottawa this week to make their case against a proposed liquefied natural gas project near Prince Rupert. Hereditary Chiefs of Lelu Island, Wetsuwe’ten and Gitxsan First Nations join other leaders to protest what they say are misleading claims of indigenous support for the Petronas-led Pacific Northwest liquefied natural gas project. A recent letter from Lax Kw’alaams Mayor John Helin to federal Environment Minister Catherine McKenna offered backing for the $36-billion LNG project on Lelu Island, south of Prince Rupert, if two conditions are met. In a new release, Hereditary Chief Donald Wesley,a Lax Kw’alaams delegation member, says the incorrect claim of aboriginal support led to a letter from the Port Authority of Prince Rupert, threatening the eviction of protesters from traditional Lelu Island territories.

Glut: There is continued waning demand in Japan and South Korea, the biggest LNG users, where spot prices collapsed almost 80 percent over the past two years. For BC to meet it’s projections, LNG demand must grow by over seven percent per year CAGR (compound annual growth rate). If the LNG market grows at the same rate as the global economy is expected to do, i.e. at not more than a 2 percent CAGR, demand and supply will not balance by 2020 or even by 2025. (Source: http://oilprice.com/Energy/Gas-Prices/Where-Is-The-LNG-Glut-Going.html)

And capacity worries? Global LNG production will expand by 146 million metric tons a year through 2020, about half the capacity of existing plants, according to Danish utility Dong Energy A/S. Why would anyone invest and build more?

Summary: LNG prices averaged about US$6.8 per million British thermal units in Japan in March, far lower than the US$16-US$18 per MBtu a few years ago, when most of the 18 LNG projects on the B.C. coast were proposed. In addition, a number of new LNG projects have come on stream over the past few years, raising doubts over demand for new LNG projects over the next decade. By the way, did you know that Petronas just slashed spending on infrastructure by cutting spending in the next three years from $3 billion to $500 million Montney basin that straddles the Alberta-B.C. border?

Corporations expand and shrink based on a mix of outlooks including global financial prospects, currency valuation and sales forecasts.

The RMOW does not derive income directly from product sales and needs to look at the economy closer than it is now.

Between January 2015 and 2016, Canadian food prices rose four per cent, according to Statistics Canada’s consumer price index. But fresh fruit and vegetables showed some of the biggest increases, shooting up 12.9 and 18.2 per cent, respectively.

Let’s put this simply. The cost of groceries is going up and I am spending more to feed my family than I did a year ago.

The decision makers at the RMOW must know that taxpayers have less disposable income, yet property taxes have increased.

The most recent five-year RMOW budget forecast calls for continues growth in expenditures, and yet without a product to sell, it must rely on continued increases in taxes and line items like DCC’s (Development Cost Charnges). Given a cap on housing, the downturn of the economy with associated disposable income in the RMOW, the municipality must not rely on continued permits/DCC’s to fund itself.

So the RMOW is looking at taxpayers again to meet shortfalls and spend on capital projects.

While the budget proposals seem to be in line with the needs of the RMOW, I am opposed to any tax increases in the short term.

I also note looking at line items in the budget expenditures and duplication of jobs there may be some fat to be trimmed. This duplication comes, from my perspective, in that Tourism Whistler and the Chamber do a lot of the same jobs as the RMOW; both are inter alia funded in part by RMOW.

Reducing staff in private corporations is normal in times of economic downturns. I hate to see anyone lose their job, and therefore do not advocate layoffs. A hiring freeze must be implemented now so this doesn’t happen.

It also concerns me that the Province of B.C. has cut funding to the RMOW (RMI funding went down this year from $7.1 million in 2015 to an expected $6.73 million). This is in part because of a downturn in the economy and that there will be a failure in the long-term budgeting of the province that is based on LNG royalties. Ergo the projected revenues for the province will not be met and we will see a “significant cut back in the public sector” as someone commented on the Whistler Politico Facebook page.

Last month the B.C. Government announced that 21 new Early Years Centres were on the way to various municipalities. When looking at some of the towns that are getting these centres, one has to wonder if they give back to the provincial coffer as much as the RMOW does?

And then when you look at the Garibaldi at Squamish development getting the green light recently on its environmental review, it would seem that RMOW concerns are being ignored provincially.

I hear time and time again that tourism is up, record hotel nights, and so forth, yet Victoria is reducing our funding. There is something fundamentally wrong here. Who is lobbying on our behalf in Victoria? No one. And in Ottawa? No one.

Our CAO has an exceptional background, but my belief is that unless you have dedicated lobbying in the provincial and federal capitals, then we are but a voice in the wilderness. Instead of spending $120,000 to study traffic on a provincial highway, the RMOW should be spending those funds on lobbying for additional funding. Spend money to make money.

Additionally, the new government in Ottawa is about to spend billions in infrastructure, and the RMOW should be looking to get some of the funds allocated to capital projects. Are we on top of that?

If the RMOW wants to spend more money, then they need to squeeze it out of the Victoria and Ottawa, not my pocket.